Do you think it's coincidence that gold gets downgraded and negative press a weeks before Cyprus have to hand theirs over? EU laughing all the way to the bank.

It's not just unstable countries like Cyprus. Northern European countries are (and have been for the last decades) dumping their gold like crazy to keep the socialistic systems afloat a little longer. it's not like they need anything but empty-promises to back our paper anymore.

Who? Germans are repatriating gold, why do you think that is?. Gordon Browne sold UK's because the Germans came looking in the late 1990s, UK is screwed. Cyprus is being forced to hand over gold to ECB. Russia, China, India buying record amounts of gold.Record levels of physical gold being withdrawn from vaults.

Do you think it's coincidence that gold gets downgraded and negative press a weeks before Cyprus have to hand theirs over? EU laughing all the way to the bank.

It's not just unstable countries like Cyprus. Northern European countries are (and have been for the last decades) dumping their gold like crazy to keep the socialistic systems afloat a little longer. it's not like they need anything but empty-promises to back our paper anymore.

Who? Germans are repatriating gold, why do you think that is?. Gordon Browne sold UK's because the Germans came looking in the late 1990s, UK is screwed. Cyprus is being forced to hand over gold to ECB. Russia, China, India buying record amounts of gold.Record levels of physical gold being withdrawn from vaults.

Do you think it's coincidence that gold gets downgraded and negative press a weeks before Cyprus have to hand theirs over? EU laughing all the way to the bank.

It's not just unstable countries like Cyprus. Northern European countries are (and have been for the last decades) dumping their gold like crazy to keep the socialistic systems afloat a little longer. it's not like they need anything but empty-promises to back our paper anymore.

Who? Germans are repatriating gold, why do you think that is?. Gordon Browne sold UK's because the Germans came looking in the late 1990s, UK is screwed. Cyprus is being forced to hand over gold to ECB. Russia, China, India buying record amounts of gold.Record levels of physical gold being withdrawn from vaults.

(edit) As well, all this repatriation will expose the fractionalization in the paper markets. Take a look at real supply/demand trends for gold and it is easy to see it going back to mid 1990's levels. Adjusted for inflation this means that $400/oz for gold is maybe a bit generous.

(edit) As well, all this repatriation will expose the fractionalization in the paper markets. Take a look at real supply/demand trends for gold and it is easy to see it going back to mid 1990's levels. Adjusted for inflation this means that $400/oz for gold is maybe a bit generous.

Do you think it's coincidence that gold gets downgraded and negative press a weeks before Cyprus have to hand theirs over? EU laughing all the way to the bank.

It's not just unstable countries like Cyprus. Northern European countries are (and have been for the last decades) dumping their gold like crazy to keep the socialistic systems afloat a little longer. it's not like they need anything but empty-promises to back our paper anymore.

Who? Germans are repatriating gold, why do you think that is?. Gordon Browne sold UK's because the Germans came looking in the late 1990s, UK is screwed. Cyprus is being forced to hand over gold to ECB. Russia, China, India buying record amounts of gold.Record levels of physical gold being withdrawn from vaults.

I heard it of other countries too, but recently it was reported in the media the Netherlands has about 20% left of their reserves just 10 years ago and are actively selling more to limit austerity measures.

The elections were actually won by one of the least socialistic parties around. I'm afraid for the next election.

Do you think it's coincidence that gold gets downgraded and negative press a weeks before Cyprus have to hand theirs over? EU laughing all the way to the bank.

It's not just unstable countries like Cyprus. Northern European countries are (and have been for the last decades) dumping their gold like crazy to keep the socialistic systems afloat a little longer. it's not like they need anything but empty-promises to back our paper anymore.

Who? Germans are repatriating gold, why do you think that is?. Gordon Browne sold UK's because the Germans came looking in the late 1990s, UK is screwed. Cyprus is being forced to hand over gold to ECB. Russia, China, India buying record amounts of gold.Record levels of physical gold being withdrawn from vaults.

Yeah, about 500 tons of 'paper' gold which represents about 1/8th of annual production. Too bad there is not a gold blockchain where you can instantly verify the quantity and quality of your gold.

you might be able to make something out of gold (and other stuff) that proves that it has remained "on" by its progress through a very difficult blockchain-like (but deterministic) calculation that is then encrypted using public/private key to ensure the no other entity is doing the calculation, but allowing you to verify at any time the progress. The private key could be microscopically patterned with gold by using some kind of deposition process that is out-of-spec so there would be a 50% chance (a bit) of it working or not. So nobody would ever know the private key. But care would have to be taken so the private key is not recoverable using an electron microscope. Presumably since the gold is the wires in the ASIC that is doing the calculation, you can't shave it. This is essentially science fiction right now...

Yeah, about 500 tons of 'paper' gold which represents about 1/8th of annual production. Too bad there is not a gold blockchain where you can instantly verify the quantity and quality of your gold.

Even with the blockchain, I expect to see an increasingly divergent market with Bitcoin as there is with gold's paper and physical divide. Private, off-blockchain transactions are likely to obscure valuation, possibly for extended periods.

I also agree that the intrinsic value of a bitcoin lies solely in its utility as a medium of exchange. Where I differ with Doug Casey is his argument that if you take away trade, a bitcoin has no value. The flaw with this argument is that you cannot take away trade. It will always exist, so a bitcoin will always have intrinsic value as long as it is useful as a medium of exchange.

That is irrelevant. There is a Bitcoin Magazine article titled, if I remember correctly, Why Useless Money Is Good Money. It really answers that question very well.

Really what Doug wants is a monetary unit with a 'put option' which is the alternate use besides its monetary use. This actually makes the monetary unit less efficient because market participants then have to factor in this to the economic calculation and the monetary use crowds out alternate uses which may be useful to humanity but are not at the higher price due solely to speculative and not industrial demand.

i see it differently. i think most of the intrinsic value of a bitcoin lies in its store of value properties.

my sense of the situation is that if a Bitcoiner had to choose the most important economic reason as to why they have invested in Bitcoin it would be b/c of the fixed supply. i know this is why i invested and its also why you see so many addresses that have no tx activity in them. investors are saving their coins, not only in expectation of appreciation, but perhaps more importantly to prevent debasement. this, i would argue, is the more sophisticated reason ppl buy Bitcoin; as a store of value and less as a medium of exchange. this imbalance will last until Bitcoin reaches its full equilibrium pricing which will be years from now once all the coins have been issued.

as evidence of this, look at what has happened in Cyprus and Spain and everywhere else where currency debasement and stealing of deposits exists. i highly doubt those ppl were fleeing into Bitcoin to use it as a medium of exchange.

its just when you first look at Bitcoin the medium of exchange argument jumps out at you. its the palpable attraction of Bitcoin involved in sending and receiving with Bitcoin that seems so cool and compelling. but honestly, ask yourself how many medium of exchange tx's have YOU made in the last month despite all of Bitcoin's tx convenience? i'd guess minimal and perhaps zero if you're behaving like the majority.

of course, making long distance tx's across borders and for micropayments Bitcoin can't be matched. but for tx's at your local Starbucks, i'd disagree. currently when i buy coffee, i just whip out my cc, swipe, and i'm done. don't even have to sign anymore. with Bitcoin (assuming Starbuck's took Bitcoin), you have to turn on the smartphone, open Bitcoin Spinner (the most efficient phone app imo), scan a barcode, punch in the amount, click send, then wait perhaps 10 min if they're not using Bitpay. not a huge deal but not as efficient as the card swipe. this ignores, of course, all the underlying cc infrastructure BS that goes on.

i like to think of store of value concepts in terms of the blockchain. when you store a large # of coins initially in an address you can be sure your coins are safe. however, there is even more safety that is gained the deeper into the blockchain that tx gets buried by the creation of subsequent blocks. this has to do with the proof of work concept. for a 51% attacker to rewrite your tx history they'd have to redo all the hashing that took place in your tx and in every subsequent block which becomes computationally astronomical. this is what is so compelling to me when i make the store of value argument.

the analogy would be building an 80 story skyscraper. its easiest to change the inner beam structure if you're only on the first floor. but when you're finishing the 80th floor and someone complains about the beam structure, he is summarily dismissed. its b/c of all the built up work that has gone into building the previous 79 floors in terms of labor, time, energy, money, and engineering. all that value has been built or stored up and can't be changed.

It's interesting how common misconceptions about Bitcoin shape so much of the market sentiment. Though on the other hand I must say I have found the very surest, most foolproof way to make a profit in the markets is to identify a systematic error or misunderstanding people have and trade against it. Misunderstandings take time to clear up and for their resolutions to percolate through to the everyman. During that time, the misconceptions push the price systematically either too high or too low than what it would be otherwise, so there is a *guaranteed* statistical advantage - guaranteed profit over the long term if you make many investments like this.

Right now Bitcoin is overwhelmingly more valuable as a SOV (store of value) than as an MOE (medium of exchange) even though it is arguably the MOE function that gives backing to the SOV function. This is a subtle point most people (on reddit, for example) aren't able to get, even if they've been in Bitcoin as "true believers" for a long time.

That misunderstanding is a lead weight on the price, and the post-Cyprus surge - resulting in more thought of Bitcoin as a SOV - is evidence of that. This will eventually become the conventional wisdom and by then that lead weight will be fully lifted, with much higher BTC valuations just from that one dispelled misunderstanding alone. Easy money!

Of course there are many many more misunderstandings and confusions and general ignorance that weigh down the price, and that is why this is still around the ground floor of the digital goldrush.

i see it differently. i think most of the intrinsic value of a bitcoin lies in its store of value properties.

[ ...snip... ]

Bitcoin is an ideal store of value.

We all see it differently, to some degree, cypherdoc.

I think the store of value component is damaged by the volatility of it.

My thought is that the intrinsic value of bitcoin lies in the transmission of value (note that this is quite different from general use as a currency). And as long as settlement times are not outstripped by volatility, it is that which gives the best bang for the buck.

Well the volatility is offset by the speed of its growth. As it gets less volatile, growth will slow as well. Growth speed and volatility are part and parcel with each other. Overall function as a store of value may even remain constant if these offset each other exactly.

you have to turn on the smartphone, open Bitcoin Spinner (the most efficient phone app imo), scan a barcode, punch in the amount, click send, then wait perhaps 10 min if they're not using Bitpay. not a huge deal but not as efficient as the card swipe. this ignores, of course, all the underlying cc infrastructure BS that goes on.

I think there is a slight difference here, you cc's convenience is established on your trust of the merchant and the credit card issuer(that they will not overcharge you)

It's interesting how common misconceptions about Bitcoin shape so much of the market sentiment. Though on the other hand I must say I have found the very surest, most foolproof way to make a profit in the markets is to identify a systematic error or misunderstanding people have and trade against it. Misunderstandings take time to clear up and for their resolutions to percolate through to the everyman. During that time, the misconceptions push the price systematically either too high or too low than what it would be otherwise, so there is a *guaranteed* statistical advantage - guaranteed profit over the long term if you make many investments like this.

Right now Bitcoin is overwhelmingly more valuable as a SOV (store of value) than as an MOE (medium of exchange) even though it is arguably the MOE function that gives backing to the SOV function. This is a subtle point most people (on reddit, for example) aren't able to get, even if they've been in Bitcoin as "true believers" for a long time.

That misunderstanding is a lead weight on the price, and the post-Cyprus surge - resulting in more thought of Bitcoin as a SOV - is evidence of that. This will eventually become the conventional wisdom and by then that lead weight will be fully lifted, with much higher BTC valuations just from that one dispelled misunderstanding alone. Easy money!

Of course there are many many more misunderstandings and confusions and general ignorance that weigh down the price, and that is why this is still around the ground floor of the digital goldrush.

i was just explaining to my 18 yo how great an investment Bitcoin is b/c its so hard to figure out.

watching all these TV pundits struggle with the underlying concepts represents a huge opportunity to make money if one can wrap their head around exactly what Bitcoin is and what it represents. this type of knowledge asymmetry exists everywhere in the traditional investment world but thru manipulated opacity.

with Bitcoin, if you're smart enough and put in the time, everyone has a chance to be successful.

It's interesting how common misconceptions about Bitcoin shape so much of the market sentiment. Though on the other hand I must say I have found the very surest, most foolproof way to make a profit in the markets is to identify a systematic error or misunderstanding people have and trade against it. Misunderstandings take time to clear up and for their resolutions to percolate through to the everyman. During that time, the misconceptions push the price systematically either too high or too low than what it would be otherwise, so there is a *guaranteed* statistical advantage - guaranteed profit over the long term if you make many investments like this.

Right now Bitcoin is overwhelmingly more valuable as a SOV (store of value) than as an MOE (medium of exchange) even though it is arguably the MOE function that gives backing to the SOV function. This is a subtle point most people (on reddit, for example) aren't able to get, even if they've been in Bitcoin as "true believers" for a long time.

That misunderstanding is a lead weight on the price, and the post-Cyprus surge - resulting in more thought of Bitcoin as a SOV - is evidence of that. This will eventually become the conventional wisdom and by then that lead weight will be fully lifted, with much higher BTC valuations just from that one dispelled misunderstanding alone. Easy money!

Of course there are many many more misunderstandings and confusions and general ignorance that weigh down the price, and that is why this is still around the ground floor of the digital goldrush.

i was just explaining to my 18 yo how great an investment Bitcoin is b/c its so hard to figure out.

watching all these TV pundits struggle with the underlying concepts represents a huge opportunity to make money if one can wrap their head around exactly what Bitcoin is and what it represents. this type of knowledge asymmetry exists everywhere in the traditional investment world but thru manipulated opacity.

with Bitcoin, if you're smart enough and put in the time, everyone has a chance to be successful.

Time for the Americans to improve their ridiculously inadequate math education.